AMENDED AND RESTATED MASTER AGREEMENT
OF
MERGER AND ACQUISITION
by and among
Highwoods Properties, Inc.,
Highwoods/Forsyth Limited Partnership,
Anderson Properties, Inc.,
Gene Anderson,
the partnerships, the tenancies in common
and limited liability companies
listed below
Dated January 31, 1997
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY
DOCUMENT USED IN CONNECTION WITH THE OFFERING AND ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO THE REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
age
ARTICLE I
DEFINITIONS................................................................ 2
ARTICLE II
THE TRANSACTIONS........................................................... 6
2.1 General.............................................. 6
2.2 Acquisition Agreements............................... 7
2.3 Conditions of Loan Assumptions.........................7
2.4 Closing.............................................. 7
2.5 Examination by Highwoods.............................. 8
ARTICLE III
CONSIDERATION............................................................... 9
3.1 Purchase Price Generally...............................9
3.2 Agreed Upon Consideration............................ 10
3.3 Closing Adjustments.................................. 11
(a) Generally....................................... 11
(b) Rent............................................ 11
(c) Preclosing Expenses and Liabilities............. 12
3.4 Fluctuation.......................................... 12
3.5 Partnership Distribution Adjustment.................. 13
3.6 Prepayment Penalties................................. 13
ARTICLE IV
COVENANTS AND AGREEMENTS................................................... 13
4.1 Operation of Business.................................13
4.2 Brokers.............................................. 14
4.3 Employments Agreements................................14
4.4 Section 754 Elections.................................14
4.5 Employees; Benefit Plans..............................14
4.6 Termination of Contracts..............................14
4.7 Contribution of API Assets............................14
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ANDERSON AND API..........................15
5.1 Consents..............................................15
5.2 Disclosure............................................15
5.3 Absence of Conflicts................................. 16
5.4 Certification of Anderson Financial Statements........16
5.5 Power and Authority of Anderson Partnerships......... 16
i
5.6 Power and Authority of API............................17
5.7 Rent Roll and Leases................................. 17
5.8 No Contracts......................................... 18
5.9 Title to Property and Partnership Interests.......... 19
5.10 Liabilities; Indebtedness............................ 19
5.11 Insurance............................................ 20
5.12 Personal Property.................................... 20
5.13 Claims or Litigation................................. 20
5.14 Hazardous Substances................................. 20
5.15 Financial Condition of the Properties and
Anderson Partnerships.................................21
5.16 Compliance with Laws................................. 21
5.17 Employees............................................ 22
5.18 Condemnation and Moratoria........................... 22
5.19 Condition of Improvements............................ 22
5.20 Taxes................................................ 22
5.21 Management Agreements................................ 23
5.22 Operating Agreements................................. 23
5.23 ERISA; Employee Benefit Plans........................ 23
5.24 Absence of Certain Changes........................... 24
5.25 Tradename.............................................24
5.26 Operation of Business................................ 25
5.27 Effect of Transactions on Title...................... 25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF HIGHWOODS................................ 25
6.1 Organization and Authority........................... 25
6.2 Binding Obligation................................... 26
6.3 Partnership Agreement................................ 26
6.4 Disclosure........................................... 26
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF HPI...................................... 26
7.1 Organization and Authority........................... 26
7.2 Binding Obligations.................................. 26
7.3 Securities Filings................................... 27
7.4 REIT Status of HPI................................... 27
ARTICLE VIII
CLOSING DELIVERIES..........................................................28
8.1 Anderson Closing Deliveries...........................28
8.2 Anderson Deliveries...................................29
ii
ARTICLE IX
CONDITIONS PRECEDENT TO HIGHWOOD'S PERFORMANCE..............................29
9.1 Representations, Warranties and Covenants............ 29
9.2 Consents..............................................30
9.3 Document Deliveries...................................30
9.4 No Adverse Proceedings................................30
9.5 Termination...........................................30
9.6 Legal Opinion.........................................30
9.7 Other Assurances......................................30
9.8 Review Period.........................................30
ARTICLE X
CONDITIONS PRECEDENT TO ANDERSON PARTIES' PERFORMANCE.......................31
10.1 Representations and Warranties........................31
10.2 Payment of Purchase Price.............................31
10.3 No Adverse Proceedings................................31
10.4 Legal Opinion........................................ 31
ARTICLE XI
INDEMNITY.................................................................. 31
11.1 Representations and Warranties of Anderson Partners.. 31
11.2 Scope of Anderson Indemnity.......................... 32
11.3 Representations and Warranties of Highwoods.......... 33
11.4 Notice to Indemnitors................................ 33
11.5 Effect of Indemnity.................................. 33
ARTICLE XII
MISCELLANEOUS.............................................................. 33
12.1 Notices.............................................. 33
12.2 Counterparts......................................... 35
12.3 Severability......................................... 35
12.4 Assigns.............................................. 35
12.5 Public Announcement.................................. 35
12.6 Remedies............................................. 35
12.7 Captions............................................. 36
12.8 Exhibits and Schedules............................... 36
12.9 Merger Clause........................................ 36
12.10 Amendments and Waiver................................ 36
12.11 Governing Laws....................................... 36
LIST OF SCHEDULES AND EXHIBITS............................................. 39
iii
AMENDED AND RESTATED MASTER AGREEMENT OF
MERGER AND ACQUISITION
This AMENDED AND RESTATED MASTER AGREEMENT OF MERGER AND ACQUISITION
(the "Amended and Restated Master Agreement") is made as of the 31st day of
January, 1997, by and among HIGHWOODS PROPERTIES, INC., a Maryland corporation
("HPI"), HIGHWOODS/FORSYTH LIMITED PARTNERSHIP, a North Carolina limited
partnership ("Highwoods"), the partnerships, tenancies in common and limited
liability companies listed on SCHEDULE 1 attached hereto (the "Anderson
Partnerships"), ANDERSON PROPERTIES, INC., a Georgia corporation ("API"), and
GENE ANDERSON, an individual resident of Atlanta, Georgia ("Anderson").
WHEREAS, Highwoods is a North Carolina limited partnership having HPI
as its sole general partner and HPI has elected to be qualified as a real estate
investment trust under the Code; and
WHEREAS, Anderson and the Anderson Partnerships own certain real
properties in Atlanta, Georgia and environs;
WHEREAS, API is engaged in certain real estate-related activities in
Atlanta, Georgia including brokerage, leasing and management;
WHEREAS, the parties desire to amend and restate that certain Master
Agreement of Merger and Acquisition Agreement entered into on January 9, 1997 by
and among HPI, Highwoods, API, Anderson and certain partnerships and limited
liability companies affiliated with Anderson (the "Master Agreement") subject to
the terms and conditions described herein;
WHEREAS, Highwoods, Anderson, and the owners of the Anderson
Partnerships (the "Anderson Partners") have entered or will enter into the
Acquisition Agreements (as defined below), pursuant to which such Anderson
Partners, subject to provisions thereof, will irrevocably agree to sell,
transfer and assign their interests in the Anderson Partnerships or the
Properties (as defined below), as the case may be, and as more particularly
described therein, to Highwoods;
WHEREAS, pursuant to the terms hereof and the terms of the Acquisition
Agreements, Highwoods, Anderson, the Anderson Partnerships and API desire to
combine their respective businesses subject to the terms, conditions, provisions
and limitations of this Amended and Restated Master Agreement; and
NOW, THEREFORE, in consideration of the premises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms shall have the following meanings for
all purposes of this Amended and Restated Master Agreement and such meanings are
equally applicable to the singular and plural forms of the terms defined. The
terms "hereof", "hereto", "herein", "hereunder" and comparable terms refer to
the entire agreement with respect to which such terms are used and not to any
particular section, subsection, paragraph or other subdivision thereof.
"ACQUISITION AGREEMENTS" means collectively the Purchase Option
Agreements (as defined below), the Exchange Option Agreements (as
defined below) and the Tradeport Agreement (as defined below).
"ACTUAL KNOWLEDGE" for the purposes of this Amended and Restated Master
Agreement shall mean information which is known to an individual or, as
to any entity, to the officers, general partners or managers of such
entity without the requirement of additional inquiry unless such
persons are aware of facts or circumstances which would lead reasonable
persons to make or conduct additional inquiry.
"ANDERSON CASH RECIPIENTS" means collectively those of the Anderson
Partners receiving cash pursuant to the transactions contemplated by
the Purchase Option Agreements.
"ANDERSON FINANCIAL STATEMENTS" means the periodic income statement and
balance sheets provided to Highwoods (including the schedules attached
thereto) for the Anderson Partnerships and API, and specifically
excludes any forecasts and projections.
"ANDERSON PARTIES" means collectively Anderson, the Anderson
Partnerships and API, without duplication.
"ANDERSON PARTNERS" means collectively Anderson, the Anderson Cash
Recipients and the Anderson Unit Recipients (as defined below) as
listed on SCHEDULE 3.2(A) attached hereto.
2
"ANDERSON PROPERTY OWNERS" means the Anderson Partnerships and
Anderson.
"ANDERSON UNIT RECIPIENTS" means collectively those parties receiving
Units (as defined below) pursuant to the transactions contemplated by
the Exchange Option Agreements and the Tradeport Agreement.
"ANDERSON UNITS" means collectively the Units to be issued to the
Anderson Unit Recipients at Closing.
"ASSUMED ANDERSON DEBT FINANCING" means the indebtedness described on
SCHEDULE 1-1 attached hereto.
"ASSUMED ANDERSON MORTGAGES" means the deeds to secure debt, mortgages
or other instruments that secure the Assumed Anderson Debt Financing.
"CLOSING DATE" means the date upon which all the conditions for closing
and consummation of the transactions contemplated by this Amended and
Restated Master Agreement shall have been satisfied, which date shall
be no later than February 14, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended.
"ENVIRONMENTAL LAW" means any and all federal, state and local laws,
regulations, ordinances and other requirements relating to pollution or
protection of the environment, including, without limitation, laws,
regulations and requirements relating to the ownership, possession,
storage and control of the Properties (as defined below) and to
emissions, discharges, releases or threatened releases of storm water,
pollutants, contaminants, toxic or hazardous substances, or solid or
hazardous wastes into the environment (including without limitation
ambient air, surface water, groundwater or land), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, toxic or
hazardous substances, or solid or hazardous wastes. The Environmental
Laws include, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OPTION AGREEMENTS" means, collectively, those agreements
listed on SCHEDULE 1-3 attached hereto and the Tradeport Agreement,
between
3
Highwoods, HPI and the parties more particularly described
therein and on SCHEDULE 1-3 pursuant to which Units are to be exchanged
for certain ownership interests in the Anderson Partnerships or in
certain of the Properties.
"HIGHWOODS PARTNERSHIP AGREEMENT" means the First Amended and Restated
Agreement of Limited Partnership of Highwoods/Forsyth Limited
Partnership dated as of June 14, 1994, as amended through the date of
Closing.
"IMPROVEMENTS" means all buildings, structures, streets, furnishings,
parking lots, landscaping, walls, ponds, culverts, fixtures, utilities,
fences, driveways, loading docks, security systems and other physical
features constructed or assembled on, at, upon or beneath any of the
Properties (whether finished or unfinished) and owned by the respective
Anderson Property Owner owning such Property.
"INDEBTEDNESS" means, without duplication, any obligations for borrowed
money and all monetary obligations to trade creditors, whether
heretofore, now or hereafter owing, arising, due or payable to any
person and howsoever evidenced, created, incurred, acquired or owing,
whether primary, secondary, direct, contingent, fixed or otherwise and
whether matured or unmatured. Without in any way limiting the
generality of the foregoing, Indebtedness specifically includes the
following: (a) all obligations or liabilities of any person that are
secured by any lien, claim, encumbrance or security interest upon
property; (b) all obligations or liabilities created or arising under
any capital lease of real or personal property, or conditional sale or
other title retention agreement with respect to property, even though
the rights and remedies of the lessor, seller or lender thereunder are
limited to repossession of such property; (c) all unfunded pension
fund, employee medical or welfare obligations and liabilities; (d)
deferred taxes; and (e) all obligations under any indemnification
agreements, guaranty agreements, letters of credit or other documents
creating such contingent liabilities.
"LIABILITY" means any liability, obligation or indebtedness of any and
every kind and nature, whether heretofore, now or hereafter owing,
arising, due, or payable by the Anderson Parties or any of them,
howsoever evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed, or otherwise, including
obligations of performance.
"LIEN" means any interest in property securing an obligation owed to,
or a claim by, a person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and
including but not limited
4
to the lien or security interest arising from
a deed to secure debt, mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease consignment or
bailment for security purposes. The term Lien shall include
reservations, exceptions, defects of any kind or nature, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting property.
"PAYABLE ANDERSON DEBT FINANCING" means the indebtedness described on
SCHEDULE 1-5 attached hereto.
"PERMITTED LIEN" means (i) liens for 1997 ad valorem taxes not yet due
and payable; (ii) restrictions, easements, covenants, reservations and
rights of way of record disclosed by Highwoods' title examination;
(iii) zoning ordinances, restrictions and other requirements imposed by
governmental authority as do not materially interfere with the present
use of a parcel of property; (iv) such imperfections of title, liens
and encumbrances, if any, as do not detract materially from the value
or interfere with the present use of a parcel of property and which do
not secure obligations for borrowed money or the deferred purchase
price of property; and (v) the liens securing the Assumed Anderson Debt
Financing and the liens securing the Payable Anderson Debt Financing.
Provided, however, that all of the items set forth at (iii) and (iv)
hereof known to Highwoods and/or which should have been disclosed by
Highwoods survey of or relating to the Properties shall be considered
Permitted Liens.
"PERSON" means any individual, joint venture, corporation, limited
liability company, voluntary association, partnership, trust, joint
stock company, unincorporated organization, association, government, or
any agency, instrumentality, or political subdivision thereof, or any
other form of entity.
"PROPERTY" or "PROPERTIES" shall mean, individually, the real property
together with any Improvements thereon and all personal property and
rights, privileges and interests appurtenant thereto (other than
"Excluded Intangibles" as defined at Section 4.1 below) owned by an
Anderson Property Owner or, collectively, by all of the Anderson
Property Owners as more particularly described on the Descriptive
Property Exhibit attached hereto at SCHEDULE 1-2.
"PURCHASE OPTION AGREEMENTS" means, collectively, those agreements
listed on SCHEDULE 1-4 attached hereto between Highwoods, HPI and the
parties more particularly described therein and on SCHEDULE 1-4
pursuant to which cash is to be paid for certain ownership interests in
the Anderson Partnerships.
5
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES LAWS" means the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder.
"SHARES" means the duly authorized common stock, par value $.01 per
share, of HPI.
"TRADEPORT AGREEMENT" means that certain Contribution and Exchange
Agreement By and Between Highwoods/Forsyth Limited Partnership and
Anderson/Tradeport, L.L.C.
"UNIT" means an undivided limited partnership interest of Highwoods,
which is exchangeable by the Unit holder for either cash or Shares,
whichever may be elected by HPI, in accordance with the Highwoods
Partnership Agreement, the Registration Rights Agreement to be executed
in conjunction with the Acquisition Agreements and Schedule H of the
Acquisition Agreements. "Units" refers both to Class A Units and to
Class B Units as provided by the Highwoods Partnership Agreement unless
otherwise specified. Class B Units are more specifically described on
Exhibit 1 attached hereto.
ARTICLE II
THE TRANSACTIONS
2.1 General. Subject to the terms, conditions, provisions and
limitations in this Amended and Restated Master Agreement, on the Closing Date
the parties shall cause the transactions contemplated hereby (the
"Transactions") to be consummated, including, but not limited to:
(a) The closings under the Acquisition Agreements, as
described in Section 2.2 below;
(b) The contribution of certain of the API Assets
(as hereinafter defined) to Highwoods pursuant to the terms and
conditions hereof;
(c) The dissolution of the Anderson Partnerships listed on
Schedule 2.1(c) (the "Acquired Anderson Partnerships") and the
resulting transfer by operation of law of all the Properties owned by
them, respectively, to Highwoods.
6
2.2 Acquisition Agreements. Highwoods shall tender the consideration
required by each of the Acquisition Agreements such that each "Final Closing",
as defined in the respective Acquisition Agreements, occurs under the terms of
each of the respective Acquisition Agreements.
2.3 Conditions of Loan Assumptions. As of the date hereof, Anderson has
provided to Highwoods true, correct and complete copies of all documents,
agreements, correspondence, waivers or other written materials (and made
Highwoods aware of any material agreements and understandings) evidencing,
securing or otherwise related to the Assumed Anderson Debt Financing (including
the Assumed Anderson Mortgages). Highwoods shall have from the date hereof until
the Closing Date (the "Review Period") to conduct its review of all
documentation required to be executed in connection with the assumption by
Highwoods of the Assumed Anderson Debt Financing (the "Assumption Documents").
If for any reason any of the terms, conditions or provisions of the Assumption
Documents, as the same are to be assumed by Highwoods, are unacceptable to
Highwoods in any respect in the sole and absolute discretion of Highwoods, then
Highwoods shall have the option at any time prior to the expiration of the
Review Period to terminate this Amended and Restated Master Agreement.
2.4 Closing.
(a) The closing of the transactions contemplated by this
Amended and Restated Master Agreement (the "Closing") shall take place
at the offices of ELROD & THOMPSON, Attorneys at Law, Atlanta, Georgia
on or before the Closing Date but, unless otherwise agreed in writing
by Highwoods and Anderson in no event later than and, if no such
unanimous agreement is reached, on February 14, 1997. The closing of
any of the Acquisition Agreements shall take place only if the Closing
hereunder occurs.
(b) Highwoods may terminate this Amended and Restated
Master Agreement without liability and without waiving any of its
rights at law or in equity by giving notice to Anderson at any time
prior to the Closing:
(i) In the event any one of the Anderson Parties is
in breach (after any applicable period of notice and
cure) in any material respect of any representation,
warranty, or covenant contained in this Amended and
Restated Master Agreement;
(ii) If the Closing shall not have occurred on or
before the Closing Date by reason of the failure of
the Anderson Parties to satisfy any condition
precedent to the performance of Highwoods (unless the
failure results from Highwoods itself breaching any
representation,
7
warranty or covenant contained in this Amended and
Restated Master Agreement);
(iii) If there has been a material adverse change in
the financial condition or business of the Anderson
Parties affecting the Properties after the date of
this Amended and Restated Master Agreement or if API
files any voluntary petition, or has filed against it
any involuntary petition, seeking liquidation,
reorganization, arrangement, readjustment of debts or
for any other relief under the United State
Bankruptcy Code or under any other statute, code or
act, whether state, federal or foreign, or becomes
insolvent or otherwise becomes subject to any
reorganization or insolvency proceeding; or
(iv) Pursuant to the terms of Section 2.3 hereof.
(v) Pursuant to the terms of Section 2.5 hereof.
(c) The Anderson Parties may terminate this Amended and
Restated Master Agreement without liability and without waiving any of
their respective rights at law or in equity by giving notice to
Highwoods at any time prior to the Closing:
(i) In the event Highwoods is in breach (after any
applicable period of notice and cure) in any material
respect of any representation, warranty, or covenant
contained in this Amended and Restated Master
Agreement;
(ii) If the Closing shall not have occurred on or
before the Closing Date by reason of any condition
precedent herein to the performance by the Anderson
Parties not being fulfilled (unless the failure
results from any of the Anderson Parties breaching
any representation, warranty, or covenant contained
in this Amended and Restated Master Agreement); or
(iii) Upon five (5) days written notice, in the event
Highwoods takes any action or fails to take any
action that would cause HPI to fail to qualify as a
real estate investment trust under the Code.
2.5 Examination by Highwoods.
(a) Highwoods shall have the right during the Review
Period to examine the Properties and to conduct title examinations,
environmental surveys and/or audits, make surveys, and conduct all
other investigations of the Properties as Highwoods
8
deems necessary to determine whether the Properties are suitable and
satisfactory to Highwoods. During the Review Period, the Anderson
Parties shall make available to Highwoods, for inspection and copying,
all environmental and engineering studies, surveys, title insurance
policies, and other documents and records that Highwoods may reasonably
request in the course of the performing its inspection activities.
Notwithstanding anything to the contrary set forth in this Agreement,
this Agreement shall terminate on the date that Highwoods gives written
notice to Anderson that the results of its examinations and
investigations undertaken during the Review Period are unsatisfactory
to Highwoods, provided that such written notice is received by Anderson
on or before the expiration of the Review Period. If Highwoods fails to
give such notice on or before the expiration of the Review Period, then
this Agreement shall continue in full force and effect in accordance
with, and subject to, all the terms and conditions hereof. Highwoods
shall have the right to determine, in Highwood's sole and absolute
discretion, whether or not the results of its inspection activities are
satisfactory. If this Agreement is terminated by Highwoods pursuant to
this Section 2.5, all rights and obligations of the parties under this
Agreement shall, except as specifically provided herein, expire, and
this Agreement shall become null and void.
(b) Highwoods agrees to indemnify and hold the Anderson
Parties harmless from and against any and all claims, causes of action,
damages, costs (including reasonable attorney's fees), injuries and
liabilities resulting from the activities of Highwoods and/or
Highwoods' agents or designees at or on the Properties. Notwithstanding
anything to the contrary contained elsewhere in this Agreement, the
provisions of this Section 2.5(b) shall survive both Closing and
termination of this Agreement.
ARTICLE III
CONSIDERATION
3.1 Purchase Price Generally. The total consideration to be transferred
or paid to the Anderson Partners on the Closing Date (the "Aggregate
Consideration") (prior to the adjustment required by Section 3.3 below) shall be
based on the following aggregate assigned values for the various Properties:
(a) The consideration for the Properties listed on
SCHEDULE 3.1(A) (the "In-Service Properties") shall be based upon a
total value for the Properties of $51,536,000 in a combination of cash,
Units (valued at $29.25 each) and debt assumption.
(b) The consideration to be tendered for the Properties
listed on SCHEDULE 3.1(B) (the "Development Properties") shall be
$8,864,447 reduced by the estimated
9
costs to complete the Development Properties and will be paid in a
combination of Units (valued at $29.25 each) and debt assumption.
(c) Schedule 3.1(c) describes the current status and
impact of any future transaction involving the properties owned by R&A
Investment Holdings I, LLC and R&A Land Holdings ("Bluegrass").
(d) The consideration for the Properties listed on
SCHEDULE 3.1(D) (the "Development Land") shall be as follows:
(i) The Tradeport property is subject to the
Tradeport Agreement.
(ii) The Chastain property currently zoned industrial
(approximately 10 acres) shall be acquired for
consideration based upon a value of $105,000 per acre
payable in a combination of Units (valued at $29.25
each) and debt assumption. The 5.69 acres of Chastain
land which is not zoned industrial shall be subject
to an option in favor of Highwoods in the form as
attached hereto as Exhibit 3.1(d).
(iii) The consideration to be paid for Newpoint shall
be based upon a value of $110,000 per acre for a
total value of $2,189,473 and shall be in the form of
a combination of debt assumption and Units (all Units
to be valued at $29.25 each) in the form of 20% Class
A Units and 80% Class B Units (25% of the Class B
Units shall convert to Class A Units on each
anniversary of the Closing Date such that the Class B
Units will be fully converted as of the fourth
anniversary of the Closing Date).
3.2 Agreed Upon Consideration. Subject to adjustment as provided below,
the aggregate consideration required by the Acquisition Agreements and this
Amended and Restated Master Agreement, to be paid by Highwoods to or in favor of
the Anderson Partners on the Closing Date (the "Aggregate Consideration") shall
be:
(a) the payment of cash in the amount of $89,403 to the
Anderson Cash Recipients pursuant to the terms of the applicable
Purchase Option Agreements and in accordance with SCHEDULE 3.2(A)
attached hereto;
(b) the issuance of 782,728 Units, including 615,698 Class
A Units and 167,030 Class B Units, to the Anderson Unit Recipients
pursuant to the terms of the applicable Exchange Option Agreements and
in accordance with SCHEDULE 3.2(A) attached hereto;
10
(c) the payment by Highwoods of the Payable Anderson Debt
Financing and the assumption of the principal balance of the Assumed
Anderson Debt Financing in the aggregate amount of $45,084,734 and the
release of all the combined Anderson Partners from any and all
liability arising out of the Assumed Anderson Debt Financing and the
succession to other liabilities as expressly provided herein.
Notwithstanding the amounts set forth in SCHEDULE 3.2(A) hereof, each Anderson
Partner's consideration (in cash or Units) to be received shall be adjusted, as
applicable, pursuant to Paragraph 2 of each such Anderson Partner's Acquisition
Agreement and Section 3.3 below.
3.3 Closing Adjustments.
(a) Generally. All real estate taxes, charges and
assessments affecting a Property, all charges for water, sewer,
electricity, gas and all other utilities and operating expenses with
respect to a Property, to the extent not paid or payable by tenants
under the Leases (as defined in Section 5.7 below and as described on
SCHEDULE 5.7A attached hereto), shall be apportioned on a per diem
basis as of midnight on the date immediately preceding the Closing. All
such expenses for the period preceding the Closing shall be deemed
expenses of the applicable Anderson Parties and all such expenses
commencing as of the Closing with respect to such Property shall be
deemed to be expenses of Highwoods. Amounts owed under this paragraph
shall be paid to the party to whom they are owed in cash at the Closing
or in the Post-Closing Adjustment Period (as defined below) in the same
manner as if the underlying real property were being sold. If any real
estate taxes, charges or assessments have not been finally assessed as
of the Closing Date for a Property for the then current calendar tax
year, they shall be adjusted at the Closing based upon the most
recently issued bills therefor. The provisions of this Section 3.3(a)
shall survive the Closing.
(b) Rent. Except for delinquent rent, all rent under an
Anderson Partnership's Leases and other income attributable to a
Property shall be apportioned on a per diem basis as of midnight on the
date immediately preceding the Closing. All such rent and other income,
including commissions earned, for the period preceding the Closing
shall be deemed to be property of the applicable Anderson Parties, and
all rent and other income for any period commencing as of the Closing
and thereafter shall be the property of Highwoods for the purpose of
making the adjustments set forth herein. Amounts owed under this
paragraph shall be paid to the party to whom they are owed in cash at
the Closing or during the Post-Closing Adjustment Period. Delinquent
rent shall not be prorated, but shall be deemed the property of the
appropriate Anderson Parties. Payments received by Highwoods from
tenants of an Anderson Partnership from and after the Closing with
respect to a Property shall be applied first to rents then due for the
current period from such tenant
11
and then to such tenant's delinquent rent as of the time of
apportionment. Highwoods shall use reasonable efforts to collect
delinquent rents for the benefit of the Anderson Parties but in no
event shall be obligated to evict or sue any tenants in order to
collect such rents and shall cooperate with the Anderson Parties in the
collection of any delinquent amounts; provided, however, that the
Anderson Parties shall not have any rights to evict such tenants for
such delinquent amounts. Any amounts received by Anderson Parties on
account of rent or other income for the period after the Closing with
respect to the Property and the related personal property shall be
turned over to Highwoods for application in accordance with the terms
of this paragraph. All accounts receivable, notes, cash and bank
accounts of the Anderson Partnerships existing as of the Closing date
shall at Closing, for the purpose of making the adjustments set forth
herein, be transferred to or retained by the appropriate Anderson
Parties, other than the remaining balance of any escrow accounts for
tenant improvements and lease commissions held by the Anderson
Partnerships, the amount necessary to pay prorations of taxes, security
deposits and amounts which belong to Highwoods after making the closing
adjustments for rent and operating expenses. Except for the adjustments
to be made in the Post Closing Adjustment Period, the parties hereto
agree that no adjustments to reimbursable income received from tenants
for taxes, insurance or common area maintenance expenses will be made
because the estimated periodic payments made by tenants of the
Properties for 1997 were more or less than the tenant actual prorated
share of taxes, insurance and common area maintenance expenses. The
provisions of this Section 3.3(b) shall survive the Closing.
(c) Preclosing Expenses and Liabilities. The parties
acknowledge that not all invoices for expenses incurred with respect to
the Properties prior to the Closing will be received by the Closing and
that a mechanism needs to be in place so that such invoices can be paid
as received. All of the prorations referred to above will be done on an
interim basis at the Closing and will be subject to final adjustment in
accordance with the provisions hereof within sixty days or such other
agreed upon period of time following Closing (the "Post-Closing
Adjustment Period"). Upon receipt by Highwoods after Closing of an
invoice for a Property's operating expenses which are attributable in
whole or in part to a period prior to the Closing and which were not
apportioned (or, if apportioned, not correctly apportioned) at Closing,
Highwoods shall submit to Anderson, as agent for the Anderson Partners,
a copy of such invoice with such additional supporting information as
Anderson shall reasonably request. Within ten (10) days of receipt of
such copy, Anderson shall pay to Highwoods an amount equal to the
portion of such invoice attributable to the period ending as of
midnight on the date immediately preceding the Closing apportioned on a
per diem basis.
12
3.4 Fluctuation. EACH OF THE ANDERSON PARTIES AND HIGHWOODS
ACKNOWLEDGES AND AGREES THAT AFTER THE EXECUTION OF THE ACQUISITION AGREEMENTS,
THE MARKET VALUE OF THE HPI COMMON STOCK WHICH IS CURRENTLY OUTSTANDING MAY
INCREASE OR DECREASE IN VALUE AS THE RESULT OF MARKET FLUCTUATIONS, AND THAT ANY
SUCH FLUCTUATIONS MAY AFFECT THE VALUE OF THE UNITS. NOTWITHSTANDING THESE
FLUCTUATIONS, HIGHWOODS WILL NOT BE REQUIRED TO INCREASE THE NUMBER OF UNITS TO
BE ISSUED TO ANY ANDERSON UNIT RECIPIENT (WHOSE PURCHASE PRICE IS PAID IN UNITS)
IN THE EVENT OF A DECREASE IN THE MARKET VALUE OF HPI COMMON STOCK PRIOR TO THE
CLOSING. LIKEWISE, EACH ANDERSON UNIT RECIPIENT WHOSE PURCHASE PRICE IS BEING
PAID IN UNITS WILL BE ENTITLED TO THAT NUMBER OF UNITS SET FORTH ON SCHEDULE
3.2(A) HEREOF NOTWITHSTANDING ANY INCREASE IN VALUE OF HPI COMMON STOCK PRIOR TO
THE CLOSING, AS SUCH INCREASE MAY INURE TO THE BENEFIT OF SUCH ANDERSON UNIT
RECIPIENT.
3.5 Partnership Distribution Adjustment. For the first fiscal quarter
of Highwoods ending after the Closing Date, partnership distributions
attributable to such quarter payable by Highwoods to the Anderson Unit
Recipients pursuant to Section 12.2C of the Highwoods Partnership Agreement
shall be prorated to take into account the period of time during such quarter
that the Anderson Unit Recipients were limited partners in Highwoods. Each
Anderson Unit Recipient shall receive that portion of a full quarterly
distribution otherwise attributable to his Units determined by multiplying the
amount of such full distribution by a fraction the numerator of which is the
number of days during such quarter that the Anderson Unit Recipient was a
limited partner in Highwoods and the denominator of which is the number of days
in such quarter. In the event that any Anderson Unit Recipient receives a full
cash distribution for such period, such Anderson Unit Recipient shall reimburse
Highwoods the prorated portion of such distribution within five (5) days of
receipt.
3.6 Prepayment Penalties. The Aggregate Consideration shall be reduced
by the prepayment penalties, or a prorated portion thereof, associated with the
payment by Highwoods of Indebtedness as described on SCHEDULE 3.5 attached
hereto.
ARTICLE IV
COVENANTS AND AGREEMENTS
4.1 Operation of Business. After making adequate provisions for all
prorations contemplated herein, specifically by Section 3.3, and by the
Acquisition Agreements, the Anderson Partnerships and API may make cash
distributions of all cash on hand immediately prior to the Closing and may
otherwise distribute all claims or other evidences of money owed to them.
Highwoods and the Anderson Parties agree to use their reasonable efforts to
reconcile prorations and other closing adjustments within the Post-Closing
Adjustment Period. In the event any party receives any payments to which any
other party is, pursuant
13
to the proration provisions hereof, entitled, such payment shall promptly be
delivered to the party so entitled.
4.2 Brokers. Each of the Anderson Parties covenants, represents and
warrants to Highwoods, and Highwoods covenants, represents and warrants to each
of the Anderson Parties that, except as indicated on SCHEDULE 4.2 attached
hereto, no broker or finder or agent has been involved or engaged by it in
connection with the transactions contemplated hereby and, each hereby agrees,
and Anderson agrees specifically as related to the persons identified on
SCHEDULE 4.2, to indemnify and hold harmless the other from and against any and
all broker's or finder's fees, commissions or similar charges incurred or
alleged to have been incurred by the indemnified party in connection with the
transactions contemplated hereby and any and all loss, liability, cost or
expense (including without limitation reasonable attorneys' fees) arising out of
any claim that the indemnifying party incurred or created any such fees,
commissions or charges.
4.3 Employment Agreements. At Closing, HPI and Anderson shall have
entered into the Employment Agreement in the form of EXHIBIT 4.3 attached
hereto.
4.4 Section 754 Elections. Anderson and each of the Acquired Anderson
Partnerships agree to cause an election under Section 754 of the Code to be
included in the final federal partnership tax return of each such Anderson
Partnership indicating Highwoods as a partner.
4.5 Employees; Benefit Plans. At Closing, either HPI or Highwoods, at
their discretion, shall hire all of the employees of API at their current level
of compensation and benefits or their equivalent economic values as such
employees were compensated by API.
4.6 Termination of Contracts. Unless otherwise specified by Highwoods
in writing, all management, development, or leasing contracts, entered into by
the Anderson Partnerships, if any, must be terminated as of the effective date
of Closing so that Highwoods or its designee shall have the exclusive right to
manage and lease the Properties.
4.7 Contribution of API Assets. All personal property listed on
SCHEDULE 4.7, including the tradename "Anderson Properties" and the associated
goodwill, used by Anderson Properties, Inc. in the operation and management of
the Properties (the "API Assets") will be transferred to Highwoods in
conjunction with the Closing and as partial consideration for the transactions
otherwise contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
ANDERSON AND API
14
To induce Highwoods and HPI to enter into this Amended and Restated
Master Agreement and the transactions contemplated hereby, unless otherwise
indicated, Anderson and API represent and warrant, and each Anderson Partnership
represents and warrants (with respect to itself only), that the statements
contained in this Article V are true, correct and complete on the date hereof.
Pursuant to Section 8.1 hereof, Anderson, each of the Anderson Partnerships
(each with respect to itself only) and API shall deliver to Highwoods at closing
a certificate certifying that all such representations and warranties are still
true, correct and complete as of the Closing Date, or to the extent that any
representation and warranty is not then true, correct and complete, stating the
fact or facts which render such representation and warranty untrue. It is the
express intention and agreement of Anderson, the Anderson Partnerships and API
that the representations and warranties set forth in this Article V shall,
except to the extent specified herein to the contrary, survive the consummation
of the transactions contemplated in this Amended and Restated Master Agreement,
but only to the extent expressly provided in Section 11.2 hereof.
5.1 Consents. Except as disclosed on SCHEDULE 5.1 attached hereto, (i)
no consents, approvals, waivers, notifications, acknowledgments or permissions
which have not been obtained are required in order for any of the Anderson
Parties to fully perform its or his respective obligations under this Amended
and Restated Master Agreement or which, if left unobtained at Closing and
thereafter, would have a material adverse affect on the value, operation,
occupation, use or development of any Property, and (ii) the execution and
delivery of this Amended and Restated Master Agreement by the Anderson Parties
and the consummation of the transactions contemplated hereby, including without
limitation the execution of any related agreements, will not require the consent
of, or any prior filing with or notice to or payment to, any governmental
authority or other Person (other than normal and customary transfer taxes,
recording and other transactional costs and expenses).
5.2 Disclosure. The representations and warranties contained in this
Amended and Restated Master Agreement (including Schedules and Exhibits and
documents or instruments delivered in connection herewith) or in any
information, statement, certificate or agreement furnished or to be furnished to
Highwoods by any of the Anderson Parties in connection with the Closing pursuant
to this Amended and Restated Master Agreement, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements and information contained herein or therein, in light of the
circumstances in which they are made, not misleading.
5.3 Absence of Conflicts. Except as set forth on SCHEDULE 5.1 AND
SCHEDULE 5.3 attached hereto, the execution, delivery and performance of this
Amended and Restated Master Agreement by the Anderson Parties and the
consummation of the transactions contemplated hereby, including without
limitation, the execution and delivery of any documents, instruments or
agreements contemplated hereby, will not (after a lapse of time, due notice or
otherwise) (a) conflict with, violate or result in any breach or default
15
under (I) any provision of any partnership agreement, operating agreement or
certificate of any of the Anderson Partnerships; (II) any provision of the
articles of incorporation or bylaws of API, (III) any law, statute, rule or
regulation of any administrative agency or governmental body, or any judgment,
order, writ, stipulation, injunction, award or decree of any court, arbiter,
administrative agency or governmental body to which the Anderson Parties or the
Properties are subject; or (IV) any indenture, agreement, instrument or other
contract to which the Anderson Parties may be bound or relating to or affecting
their assets (except for the documents and instruments evidencing and/or
securing the Assumed Anderson Debt Financing and the Payable Anderson Debt
Financing); or (b) result in the acceleration of, create in any party the right
to accelerate, terminate, modify or cancel, or require any notice under or
result in the creation or imposition of any Lien on the Properties or related
assets in accordance with the terms of this Amended and Restated Master
Agreement under any indenture, mortgage, contract, agreement, lease, sublease,
license, sublicenses, franchise, permit, instrument of indebtedness, security
agreement or other undertaking or instrument to which the Anderson Parties may
be bound or affected.
5.4 Certification of Anderson Financial Statements. The Anderson
Financial Statements are true, correct and complete in all material respects,
are prepared in accordance either with generally acceptable accounting
principles or federal income tax principles, consistently applied, and fairly
present the financial condition of each of the applicable Anderson Parties.
5.5 Power and Authority of Anderson Partnerships. Each of the Anderson
Partnerships is a partnership, limited liability company or tenancy in common,
as the case may be, duly formed and validly existing under the laws of the State
of Georgia. Each partner, owner or member of the Anderson Partnerships (which is
controlled directly or indirectly by Anderson and/or API) which is not an
individual has been duly formed and is validly existing. All partnership
interests in each Anderson Partnership have been validly issued and fully paid.
True, correct and complete copies of each of the partnership agreements and
operating agreements, as applicable, of the Anderson Partnerships and all
amendments thereto have been submitted to Highwoods prior to the date of this
Amended and Restated Master Agreement. Each of the Anderson Partnerships has
full power and authority to own and operate its properties and to enter into and
perform its obligations under this Amended and Restated Master Agreement and the
documents and instruments contemplated hereby to which they are a party, and the
execution, delivery and performance of this Amended and Restated Master
Agreement have been duly authorized by all requisite partnership or company
actions on the part of each of the Anderson Partnerships. This Amended and
Restated Master Agreement constitutes, and the documents and instruments
contemplated hereby and other instruments and documents to be executed and
delivered by Anderson and the Anderson Partnerships, as applicable, hereunder
will, when executed, constitute the legal, valid and binding obligations of
Anderson and the Anderson Partnerships, respectively, enforceable against them
in accordance with their respective
16
terms, subject to bankruptcy and similar laws effecting the remedies or recourse
of creditors generally. The Closing of the Acquisition Agreements and the
Amended and Restated Master Agreement will effectuate the transfer of all of the
ownership interests in each of the Acquired Anderson Partnerships.
5.6 Power and Authority of API. API is a corporation duly incorporated,
validly existing and authorized to transact business under the laws of the State
of Georgia and is authorized to transact business as a foreign corporation in
all states where the ownership of assets or the nature of its business requires
qualification as a foreign corporation, with full corporate power and authority
to conduct its business as it has been conducted in the past and enter into and
perform its obligations under each of the Acquisition Agreements, this Amended
and Restated Master Agreement and each of the documents and instruments
contemplated by this Amended and Restated Master Agreement. The execution,
delivery and performance of each of the Acquisition Agreements, this Amended and
Restated Master Agreement, the consummation of the transactions contemplated
hereby and the execution of the documents and instruments contemplated hereby
have been duly authorized by all requisite corporate action on the part of API
and this Amended and Restated Master Agreement constitutes, each of the
Acquisition Agreements constitutes, and the instruments and documents to be
executed and delivered by API hereunder will, when executed, constitute the
legal, valid and binding obligations of API, enforceable against it in
accordance with their respective terms, subject to bankruptcy and similar laws
effecting the remedies or recourse of creditors generally.
5.7 Rent Roll and Leases. The schedule of leases attached hereto as
SCHEDULE 5.7A (the "Schedule of Leases") is a true, correct and complete
schedule of all leases, subleases and rights of occupancy (claiming directly by,
through, under or with the knowledge of Anderson, the Anderson Partnerships or
API) in effect with respect to each of the Properties, (respectively, the
"Leases"), and there have been no material changes to the Schedule of Leases.
Except as set forth on the Schedule of Leases, there are no other leases,
subleases, tenancies or other rights of occupancy (claiming directly by,
through, under or with the knowledge of Anderson, the Anderson Partnerships or
API) in effect with respect to the Properties other than the Leases. True,
correct and complete copies of the Leases, together with all amendments and
supplements thereto and all other documents and correspondence relating thereto,
have been delivered or made available to Highwoods and its agents. SCHEDULE 5.7A
includes the rent roll information and is, as of the date shown thereon, true
and correct in all material respects. The Schedule of Leases sets forth, as of
such date, (I) a list of all tenants under the Leases and the space occupied by
each such tenant, (II) all arrearages owing from such tenants under such Leases
(listed on delinquency and default reports attached to the and made a part
thereof), (III) the expiration date of the term of such Leases, (IV) the base
rent and the rent the tenant under such Lease is currently obligated to pay, (V)
the current outstanding balances of any security deposits held pursuant to any
Leases, (VI) any prepayments of rent by any tenant under any Lease of more than
one
17
(1) month in advance (excluding security deposits which are delineated on the
list attached to the Schedule of Leases and made a part thereof) and (VII)
whether or not there are rental concessions or abatements under a Lease
applicable to any period subsequent to the Closing. Except as set forth on the
Schedule of Leases, all such Leases are valid and enforceable and presently in
full force and effect, and none of the Leases have been assigned and all
brokerage commissions payable under any of the Leases have been paid or will be
paid by the Anderson Partnerships prior to the Closing Date, except as provided
in SCHEDULE 5.7B attached hereto. All tenant upfit obligations provided for in
any of the Leases not set forth on SCHEDULE 5.7C will be completed or paid for
in full prior to the Closing or will be paid from escrow funds established for
such purposes (and any excess amounts shall be the obligation of Anderson
regardless of when incurred). Except as set forth on SCHEDULE 5.7D attached
hereto or the tenant estoppel certificates, none of the Anderson Partnerships or
any lessee under any Lease, is in default under such Lease, and there is no
event which, but for the passage of time or the giving of notice, or both, would
constitute a default under such Leases, except such defaults that would not have
a material adverse effect on the condition, financial or otherwise or on the
earnings, business affairs or business prospects of any of the Anderson
Partnerships or the Properties. Except as set forth on the Schedule of Leases,
no tenant under any of the Leases has an option or right of first refusal to
purchase the premises demised under such Leases. The consummation of the
transactions contemplated by this Amended and Restated Master Agreement will not
give rise to any breach, default or event of default under any of the Leases.
Each of the Leases is assignable by the applicable Anderson Partnership and,
except as disclosed on SCHEDULE 5.7E attached hereto, none of the Leases
requires the consent or approval of any party in connection with the
transactions contemplated by this Amended and Restated Master Agreement.
5.8 No Contracts. No agreements, undertakings or contracts affecting
the Properties, the Acquired Anderson Partnerships or API, written or oral, will
be in existence as of the Closing, except as set forth on SCHEDULE 1-1, SCHEDULE
5.7A [Leases], SCHEDULE 1-5 and SCHEDULE 5.8 attached hereto. With respect to
any such contracts set forth on SCHEDULE 5.8 (collectively, the "Scheduled
Contracts"), each such contract is valid and binding on the applicable Anderson
Partnership and is in full force and effect in all material respects. Except as
specifically set forth on SCHEDULE 5.8 attached hereto, no party to any
Scheduled Contract to API's or Anderson's Actual Knowledge has breached or
defaulted under the terms of such contract, except for such breaches or defaults
that would not have a material adverse effect on the business or operations of
any of the Properties or any of the Anderson Partnerships, as applicable. None
of the Scheduled Contracts requires the consent or approval of any party in
connection with the transactions contemplated by this Amended and Restated
Master Agreement.
5.9 Title to Property and Partnership Interests. The Descriptive
Property Exhibit hereof represents a true, correct and complete description of
all ownership interests in the Properties, and there exist no other ownership
interests in the Properties except as
18
disclosed thereon. Either the Anderson Partnerships or Anderson own and will own
at Closing good, valid and marketable fee simple title to the Properties, in
such forms and in such percentages as are shown on the Descriptive Property
Exhibit hereof; the Anderson Partnerships or Anderson, respectively, own good,
valid and marketable title to all personal property listed on SCHEDULE 5.9A
attached hereto (the "Personal Property"). API owns good, valid and marketable
title to the API Assets, free and clear of any Lien. Each owner of any interests
in any of the Anderson Partnerships owns, to Anderson's and API's Actual
Knowledge, good, valid and marketable title to such interest(s) in the Anderson
Partnership(s) as are being conveyed to Highwoods under the Acquisition
Agreements free and clear of any lien, encumbrance, security interest, option,
restriction, subscription or other similar right or interest, and such owner
has, to Anderson's and API's Actual Knowledge, the absolute and unconditional
right, power and authority to perform under the respective Acquisition
Agreements. Upon the consummation of the transactions contemplated by this
Amended and Restated Master Agreement and the Acquisition Agreements, Highwoods
will receive good and marketable title to all such interests in all of the
Acquired Anderson Partnerships and all of the Properties, free and clear of any
Liens (other than Permitted Liens). The Properties are not subject to any Liens
except Permitted Liens and the easements, encumbrances and other exceptions to
title listed as SCHEDULE 5.9B attached hereto.
5.10 Liabilities; Indebtedness. Except for the Assumed Anderson Debt
Financing and the Payable Anderson Debt Financing, the Leases, the leasing
commissions listed on SCHEDULE 5.7B and the operating agreements listed on
SCHEDULE 5.22, and those liabilities disclosed to Highwoods in writing on
SCHEDULE 5.10 hereto, no Indebtedness related to the Properties has been
incurred except in each instance for trade payables and any other customary and
ordinary expenses in the ordinary course of business that either will be paid
and discharged in full by Anderson or the Anderson Partnerships, respectively,
will be subject to adjustment as provided in Section 3.3 hereof or will remain
an obligation of Anderson or an Anderson Partnership, no part of the ownership
of which such Anderson Partnership is owned by Highwoods after Closing, as of
the Closing. At Closing and after giving effect to the transactions contemplated
by this Amended and Restated Master Agreement, there will exist no default, or
event which with the passage of time or giving of notice or both would
constitute a default with respect to the Assumed Anderson Debt Financing. The
Payable Anderson Debt Financing is unconditionally prepayable in full, without
penalty, premium or charges, except as disclosed in SCHEDULE 1-5 attached
hereto. Except as shown on the Anderson Financial Statements, none of the
Anderson Partnerships, is subject to or obligated or liable under any Liability
except for ordinary and customary expenses incurred in the ordinary course of
business.
5.11 Insurance. Each of the Anderson Parties currently maintains or
causes to be maintained all of the public liability, casualty and other
insurance coverage with respect to the Properties and their respective
businesses as set forth on SCHEDULE 5.11 attached
19
hereto. All such insurance coverage shall be maintained in full force and effect
through the Closing and all premiums due and payable thereunder have been, and
shall be, fully paid when due.
5.12 Personal Property. All equipment, fixtures and personal property
located at or on any of the Properties or at the place(s) of business of API,
respectively, which is owned or leased by the Anderson Partnerships or API, as
applicable, shall remain at the Properties or at the place(s) of business of API
and shall not be removed prior to the Closing, except for equipment that becomes
obsolete or unusable, which may be disposed of or replaced in the ordinary
course of business. The personal property of the Anderson Partnerships and of
API is not subject to any liens except for Permitted Liens.
5.13 Claims or Litigation. Except as set forth on SCHEDULE 5.13
attached hereto, none of the Anderson Parties nor any of the Properties are
subject to claim, demand, suit or unfiled lien, proceeding or litigation of any
kind, pending or outstanding, before any court or administrative, governmental
or regulatory authority, agency or body, domestic or foreign, or to any order,
judgment, injunction or decree of any court, tribunal or other governmental
authority, or, to the Actual Knowledge of Anderson or API, threatened, or likely
to be made or instituted, which would have a materially adverse affect on the
business or financial condition of any of the Anderson Parties or any of the
Properties or in any way be binding upon Highwoods or affect or limit Highwoods'
full use and enjoyment of any of the Properties or which would limit or restrict
in any way any Anderson Party' right or ability to enter into this Amended and
Restated Master Agreement and consummate the assignments, transfers, conveyances
and any other transaction contemplated hereby.
5.14 Hazardous Substances. Except as set forth in the environmental
audit reports provided to Highwoods by the Anderson Parties and in the
environmental assessments of the Properties conducted on behalf of Highwoods
(the "Environmental Assessments"), the Anderson Parties have not generated,
stored, released, discharged or disposed of hazardous substances or hazardous
wastes at, upon or from any of the Properties in violation of any Environmental
Law, order, judgment or decree or permit, or in connection with which remedial
action would be required under any Environmental Law, order, judgment, decree or
permit. Except as set forth in the environmental audit reports provided to
Highwoods by the Anderson Parties or in the Environmental Assessments, no
hazardous substances or hazardous wastes have otherwise been generated, stored,
released, discharged or disposed of from, at or upon any of the Properties in
violation of any Environmental Law. Except as set forth in the environmental
audit reports provided to Highwoods by the Anderson Parties or in the
Environmental Assessments, no underground storage tanks are to Anderson's and
API's Actual Knowledge located on any of the Properties. As used in this Amended
and Restated Master Agreement, the terms "hazardous substances" and "hazardous
wastes" shall have the meanings set forth in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, and the regulations
thereunder, the Resource
20
Conservation and Recovery Act, as amended, and the regulations thereunder, and
the Federal Clean Water Act, as amended, and the regulations thereunder, and
such terms shall also include asbestos, petroleum products, radioactive
materials and any regulated substances under any Environmental Law, regulation
or ordinance.
5.15 Financial Condition of the Properties and Anderson Parties. Except
as set forth in SCHEDULE 5.15 attached hereto, there has been no material
adverse change, financial or otherwise, in any of the Anderson Parties or any of
the Properties as previously represented by any of the Anderson Parties,
including, without limitation, as disclosed in the Anderson Financial
Statements.
5.16 Compliance with Laws. The Anderson Parties possess such
certificates, authorities or permits issued by the appropriate state or federal
regulatory agencies or bodies necessary to conduct the business to be conducted
by them and, to Anderson's and API's Actual Knowledge, there are no proceedings
relating to the revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of any of the Anderson Partnerships, API or any of the Properties, as
applicable. There is no violation to Anderson's and API's Actual Knowledge of
any applicable zoning, building or safety code, rule, regulation or ordinance,
or of any employment, environmental, wetlands or other regulatory law, order,
regulation or other requirement, including without limitation the Americans With
Disabilities Act ("ADA"), or any restrictive covenants or other easements,
encumbrances or agreements, relating to any of the Properties, which remains
uncured. To Andersons' and API's Actual Knowledge: (i) each of the Properties,
has been constructed and is operated in accordance with all applicable laws,
ordinances, rules and regulations, (ii) all approvals regarding zoning, land
use, subdivision, environmental and building and construction laws, ordinances,
rules and regulations have been obtained, and (iii) such approvals will not be
invalidated by the consummation of the transactions contemplated by this Amended
and Restated Master Agreement. The representations and warranties, except to the
extent provided by Section 5.2 hereof, shall not survive Closing.
5.17 Employees. None of the Anderson Partnerships presently has any
employees nor have any of the Anderson Partnerships ever had any such employees.
5.18 Condemnation and Moratoria. There are to Andersons's and API's
Actual Knowledge (i) no pending or threatened condemnation or eminent domain
proceedings, or negotiations for purchase in lieu of condemnation, which affect
or would affect any portion of any of the Properties; (ii) no pending or
threatened moratoria on utility or public sewer hook-ups or the issuance of
permits, licenses or other inspections or approvals necessary in connection with
the construction or reconstruction of improvements, including without limitation
tenant improvements, which affect or would affect any portion of any of the
21
Properties; and (iii) no pending or threatened proceeding to change adversely
the existing zoning classification as to any portion of any of the Properties.
To Anderson's and API's Actual Knowledge, (x) no portion of any of the
Properties is a designated historic property or located within a designated
historic area or district, and (y) there are no graveyards or burial grounds
located within any of the Properties.
5.19 Condition of Improvements. Except as disclosed or made known to
Highwoods in the course of its inspection activities or except as described on
SCHEDULE 5.19 attached hereto, there is to Anderson's and API's Actual Knowledge
no material defect in the condition of (i) any of the Properties, (ii) the
improvements thereon, (iii) the roof, foundation, load-bearing walls or other
structural elements thereof, or (iv) the mechanical, electrical, plumbing and
safety systems therein, nor any material damage from casualty or other cause,
nor any soil condition of any nature that will not support all of the
Improvements currently thereon without the need for unusual or new subsurface
excavations, fill, footings, caissons or other installations. The
representations and warranties, except to the extent provided by Section 5.2
hereof, shall not survive Closing.
5.20 Taxes. Except as set forth on SCHEDULE 5.20 attached hereto, (i)
all tax or information returns required to be filed on or before the date hereof
by or on behalf of the Anderson Parties or the Properties have been filed and
all such tax or information returns required to be filed hereafter will be filed
on or before the date due in accordance with all applicable laws prior to the
incurrence of any penalties or interest thereon and all taxes shown to be due on
any returns have been paid or will be paid when due; and (ii) there is no
action, suit or proceeding pending against or threatened with respect to any
Anderson Party or any of the Properties in respect of any tax, nor is any claim
for additional tax asserted by any taxing authority. None of the Anderson
Parties nor any of their respective federal, state and local income or franchise
tax returns are to Anderson's and API's Actual Knowledge the subject of any
audit or examination by any taxing authority. None of the Anderson Parties has
executed or filed with the Internal Revenue Service or any other taxing
authority any agreement now in effect extending the period for assessment or
collection of any income or other taxes.
5.21 Management Agreements. All management, service and similar
agreements in effect between any of the Anderson Parties and any affiliates of
the Anderson Parties are described on SCHEDULE 5.21 attached hereto
(collectively, the "Management and Leasing Agreements"), and all such Management
and Leasing Agreements relating to the Properties shall be terminated as of the
Closing Date and thereafter shall be void and of no further force and effect.
5.22 Operating Agreements. True, complete and correct copies of all
agreements pertaining to the operation of the Properties as of the date hereof
(collectively, the "Existing Operating Agreements") have been provided or made
available to Highwoods. The Existing
22
Operating Agreements are in full force and effect, no Anderson Party is in
default of any of its material obligations under any of such Existing Operating
Agreements, and except for those set forth on SCHEDULE 5.22 attached hereto, all
Existing Operating Agreements are terminable on not more than thirty (30) days
prior written notice and without payment of any penalty. At the Closing with
respect to each of the Properties, true, complete and correct copies of such
Existing Operating Agreements shall have been provided or made available to
Highwoods and, the Existing Operating Agreements shall be, unless otherwise
described in writing to Highwoods or except as otherwise provided herein, (x) in
full force and effect and (xi) free from any default by the appropriate Anderson
Partnership of any of its material obligations under any of them. Anderson shall
advise Highwoods immediately of any default by any party to an Existing
Operating Agreement.
5.23 ERISA; Employee Benefit Plans. Except as disclosed on SCHEDULE
5.23 attached hereto, none of the Anderson Parties nor any Person which, in
conjunction with any of the Anderson Parties, is treated as a single employer
under Section 414 of the Code (referred to as an "ERISA Affiliate") has any
officer or employee bonus, incentive compensation, profit-sharing, pension,
stock ownership, medical expense reimbursement plan, group insurance or employee
welfare or benefit plan of any nature whatsoever (an "Employee Benefit Plan"),
including, without limitation, any "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or any "multiemployer plan" within the meaning of ERISA. To the
extent, if any, that there has heretofore been any such Employee Benefit Plan in
effect, such plan has been terminated, required notice, if any, has been given
to the Pension Benefit Guaranty Corporation and received from such Anderson
Party or ERISA Affiliate and all liabilities, if any, of any Anderson Party with
respect thereto have been fully and finally discharged and released in writing.
No Anderson Party or any ERISA Affiliate has any obligation, liability or
commitment to any Person with respect to any Employee Benefit Plan that will be
the obligation of, or will affect the property or assets of HPI or Highwoods.
5.24 Absence of Certain Changes. Since October 31, 1996, except as
otherwise set forth in this Amended and Restated Master Agreement or as
disclosed in writing to Highwoods by an Anderson Party or as otherwise known to
Highwoods, there has not been with respect to Anderson, API or any of the
Anderson Partnerships:
(a) any material adverse change in the financial condition
of any of such Anderson Parties;
(b) any change in the condition of the property, business
or liabilities of any of the Anderson Partnerships or API except normal
and usual changes in the ordinary course of business which have not
been materially adverse;
23
(c) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the properties
or business of any of the Anderson Partnerships or API;
(d) any sale, abandonment or other disposition by any of
the Anderson Partnerships or API or of any interest in the Properties,
or of any personal property other than in the ordinary course of such
Anderson Partnerships or API's business;
(e) any change in the accounting methods or practices by
any of the Anderson Partnerships or API or in depreciation or
amortization policies theretofore used or adopted;
(f) any material contractual liability incurred by any of
the Anderson Partnerships or of API, contingent or otherwise, other
than for operating expenses, obligations under executory contracts
incurred for fair consideration and taxes accrued with respect to
operations during such period, all incurred in the ordinary course of
business; or
(g) any other material change in the business of any of
the Anderson Partnerships or API, or any of the Properties.
5.25 Tradename. API owns all right, title and interest in and to the
tradename "ANDERSON PROPERTIES " and all variations and derivatives thereof and
goodwill associated therewith arising out of the use of such tradename
(collectively, the "Tradename") free and clear of any Liens or pending or
threatened third party claims for infringement or unlawful use thereof, and API
has the right to sell, transfer, assign and convey the Tradename to Highwoods.
API will at Closing, transfer to Highwoods all of its right, title and interest
in the Tradename, including the goodwill associated therewith and the rights to
all the variations to the Tradename.
5.26 Operation of Business. Except as set forth on Schedule 5.26
attached hereto, from November 14, 1996 through the Closing Date, API has
conducted its business only in the ordinary course and has not granted any
substantial or general or uniform increase in the rate of pay of any employees
or any substantial increase in salaries to any employees or officers (by means
of bonus, pension plan or other contract or otherwise).
5.27 Effect of Transactions on Title. After giving effect to the
Transactions, Highwoods will be the owner of the Personal Property and the API
Assets, free and clear of any Liens or ownership interests except for the
Permitted Liens.
24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF HIGHWOODS
To induce the Anderson Parties to enter into this Amended and Restated
Master Agreement and the transactions contemplated hereby, Highwoods hereby
represents and warrants to the Anderson Parties that the statements contained in
this Article VI are true, correct and complete as of the date hereof. Highwoods
shall deliver to the Anderson Parties, as applicable, at Closing a certificate
certifying that all such representations and warranties are still true, complete
and correct as of the Closing Date, or to the extent that any such
representations and warranties are not true, correct and complete, stating the
fact or facts which render such representation and warranty untrue. It is the
express intention and agreement of Highwoods that the foregoing representations
and warranties shall survive the consummation of the transactions contemplated
in this Amended and Restated Master Agreement, except as expressly provided in
Section 11.4 hereof.
6.1 Organization and Authority. Highwoods has been duly formed and is
validly existing as a North Carolina limited partnership and is duly qualified
to do business in all jurisdictions where such qualification is necessary to
carry on its business as now conducted and is duly qualified or in the process
of becoming duly qualified in all jurisdictions where the ownership of its
property would necessitate such qualification. Highwoods has all partnership
power and authority under its Partnership Agreement and its certificate of
limited partnership to enter into this Amended and Restated Master Agreement and
the Acquisition Agreements and to enter into and deliver all of the documents
and instruments required to be executed and delivered by Highwoods and to
perform its obligations hereunder and thereunder.
6.2 Binding Obligation. The execution and delivery of this Amended and
Restated Master Agreement, the Acquisition Agreements and the documents required
to be executed by Highwoods hereunder and thereunder, and the performance of its
obligations under this Amended and Restated Master Agreement and the Acquisition
Agreements, have been duly authorized by all requisite partnership action, and
this Amended and Restated Master Agreement and the Acquisition Agreements have
been, and such documents will on the Closing date have been, duly executed and
delivered by Highwoods. This Amended and Restated Master Agreement and the
Acquisition Agreements do and will, and the documents executed by Highwoods
will, constitute the valid and binding obligation of Highwoods enforceable in
accordance with their terms, subject to bankruptcy and similar laws affecting
the remedies or recourse of creditors generally.
6.3 Partnership Agreement. The Partnership Agreement and amendments
previously delivered to Anderson or his attorneys is a true, complete and
correct copy of the limited partnership agreement of Highwoods, as amended. The
Partnership Agreement is in
25
full force and effect and has not been further amended, modified or terminated
except as disclosed to Anderson or the Anderson Parties.
6.4 Disclosure. To the Actual Knowledge of Highwoods, the
representations and warranties contained in this Amended and Restated Master
Agreement (including Schedules and Exhibits and documents or instruments
delivered in connection herewith) or in any information, statement, certificate
or agreement furnished or to be furnished to any of the Anderson Parties by
Highwoods in connection with the Closing pursuant to this Amended and Restated
Master Agreement, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements and information
contained herein or therein, in light of the circumstances in which they are
made, not misleading.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF HPI
HPI hereby represents and warrants to each Anderson Party as follows:
7.1 Organization and Authority. HPI has been duly formed and is validly
existing as a Maryland corporation and has elected under the Code to be treated
as a real estate investment trust, and is duly qualified to do business in all
jurisdictions where such qualification is necessary to carry on its business as
now conducted and is duly qualified or in the process of becoming duly qualified
in all jurisdictions in which its properties or Highwoods' properties are
located. HPI has all power and authority under its organizational documents to
enter into this Amended and Restated Master Agreement and such other documents
as are required hereby and by the Acquisition Agreements to be executed by it.
7.2 Binding Obligations. The execution and delivery of this Amended and
Restated Master Agreement, the Acquisition Agreements and the documents required
to be executed by HPI by the terms hereof and thereof, and the performance of
its obligations under this Amended and Restated Master Agreement, the
Acquisition Agreements and the documents executed by it, have been duly
authorized by all requisite action and this Amended and Restated Master
Agreement, the Acquisition Agreements, and the documents required to be executed
by it have been and will on the Closing Date have been, duly executed and
delivered by HPI. To the Actual Knowledge of HPI, none of the foregoing requires
any action by or in respect of, or filing with, any governmental body, agency or
official or contravenes or constitutes a default under any provision of
applicable law or regulation, any organizational document of HPI or any
agreement, judgment, injunction, order, decree or other instrument binding upon
HPI. This Amended and Restated Master Agreement does and will, and the documents
required to be executed by it will, constitute the valid and binding obligations
of HPI enforceable in accordance with their respective
26
terms, subject to bankruptcy and similar laws affecting the remedies or
resources of creditors generally.
7.3 Securities Filings. HPI has delivered or made available to Anderson
the registration statement of HPI filed with the SEC in connection with HPI's
initial public offering of Shares of HPI common stock, and all exhibits,
amendments and supplements thereto (the "Initial Registration Statement"), and
each report, proxy statement or information statement and all exhibits thereto
prepared by it or relating to its properties since the effective date of the
Initial Registration Statement each in the form (including exhibits and any
amendments thereto) filed with the SEC (collectively, the "Highwoods Reports").
The Highwoods Reports, which were filed with the SEC in a timely manner,
constitute all forms, reports and documents required to be filed by HPI under
the Securities Laws. As of their respective dates, the Highwoods Reports (i)
complied as to form in all material respects with the applicable requirements of
the Securities Laws and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in the light of circumstances under which
they were made, not misleading. No material adverse change in the financial
condition, business operations or properties of HPI has occurred that would
render any material statement made in any of the Highwoods Reports materially
untrue or misleading.
7.4 REIT Status of HPI. HPI is organized and operates and will continue
to operate in a manner so as to qualify as a "real estate investment trust"
under Section 856 thorough 860 of the Code. HPI has elected, and will continue
to elect, to be taxed as a "real estate investment trust" under the Code.
ARTICLE VIII
CLOSING DELIVERIES
8.1 Anderson Closing Deliveries. At Closing or at such earlier date if
otherwise provided in this Amended and Restated Master Agreement or if otherwise
expressly agreed by Highwoods, the Anderson Parties shall deliver or cause to be
delivered to Highwoods the following documents, instruments, opinions,
certificates and statements:
(a) The documents, instruments, deeds, assignments,
affidavits, forms, contracts and agreements required to be delivered
under the Acquisition Agreements;
(b) A tenant estoppel certificate in the form attached
hereto as Exhibit 8.1(e) from each tenant under the Leases provided,
however, this Section 8.1(e) shall be deemed satisfied if such tenant
estoppel certificates are delivered from tenants occupying
eighty-percent (80%) of the aggregate net rented square feet of the
improved Properties (the "Buildings"). To the extent the Anderson
Parties shall not have delivered tenant estoppel certificates by
Closing from tenants occupying 80%
27
of the net rented space of the Buildings, Anderson will execute a
sufficient number of certificates (certifying the same matters set
forth in the tenant estoppel certificates submitted to tenants which
were not received) (the "Owner Estoppel Certificates") related to
tenants leasing that number of net rented square feet in the Buildings,
which when added to the net rented square feet in the Buildings leased
by tenants whose tenant estoppel certificates have been received, will
equal 80% or more of the net rented square feet in the Buildings.
Anderson will agree to indemnify Highwoods from loss or damage incurred
by Highwoods resulting from the inaccuracy of any matter contained in
such certificates executed by Anderson. Notwithstanding the
representations and warranties of Anderson to its Actual Knowledge
related to the Leases as set forth in Section 5.7 above, the Owner
Estoppel Certificates shall not be limited to Anderson's Actual
Knowledge, but rather shall contain unconditional representations.
Anderson agrees to send estoppel certificates to all tenants of the
Property and request that the same be completed and returned for
delivery to Highwoods. Provided, further, Anderson will be released
from liability under the above referenced indemnifications pari passu
with the receipt of executed tenant estoppels subsequent to Closing.
(c) A lender's estoppel certificate and assumption
agreement from each of the holders of the Assumed Anderson Debt
Financing ;
(d) A certified payoff letter, effective through the
Closing Date, from each of the holders of the Payable Anderson Debt
Financing, and such evidence of cancellation of documents or
instruments as Highwoods reasonably may require;
(e) If requested by Highwoods, quit claim deeds or
articles of merger and dissolution and bills of sales to facilitate the
dissolution of the Anderson Partnerships pursuant to Section 2.1(c)
hereto in form and substance satisfactory to Highwoods and its counsel;
(f) An assignment of the Tradename and all derivatives or
variations thereof used prior to the Closing Date in form and substance
satisfactory to Highwoods and its counsel;
(g) Evidence, obtained based upon the best efforts of the
Anderson Parties, of compliance by the Properties, (and the
development, operation, occupation and use thereof) with all applicable
land use, zoning, building, planning, development, subdivision,
watershed and other similar laws, rules, regulation and ordinances from
all governmental or quasi-governmental agencies, boards, departments,
bodies, commissions or subdivisions having or asserting jurisdiction
over the Properties or the development, operation, use or occupancy
thereof in form, content and detail satisfactory to Highwoods and its
counsel.
28
8.2 Additional Deliveries. Each of the Anderson Parties agrees to
execute and deliver to Highwoods or cause to be executed and delivered to
Highwoods such further documents, instruments, statements, opinions,
certificates, deeds, waivers and agreements as Highwoods reasonably may deem
necessary or appropriate to carry out the terms and provisions of this Amended
and Restated Master Agreement.
ARTICLE IX
CONDITIONS PRECEDENT TO
HIGHWOODS'S PERFORMANCE
The obligations of Highwoods to consummate the transactions provided
for herein on the Closing Date are subject to the fulfillment on or before the
Closing Date of each of the conditions in this Article IX, except to the extent
that Highwoods may, in its absolute discretion, waive one or more thereof in
writing in whole or in part, unless expressly provided otherwise herein.
9.1 Representations, Warranties and Covenants. The representations and
warranties of the Anderson Parties contained herein shall be true in all
material respects on and as of the Closing Date with the same force and effect
as if made on and as of such date and the covenants and agreements of the
Anderson Parties set forth herein shall have been complied with through the
Closing Date in all material respects, and a certificate of such effect shall be
executed and delivered to Highwoods by the Anderson Parties on and as of the
Closing Date.
9.2 Consents. The consents described in SCHEDULES 5.1 AND 5.7E shall
have been obtained in form reasonably satisfactory to Highwoods.
9.3 Document Deliveries. The Anderson Parties shall have delivered or
caused to be delivered to Highwoods the documents, instruments and other items
referred to in Article VIII above.
9.4 No Adverse Proceedings. No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been commenced, no
investigation by any governmental or regulatory authority shall have been
commenced, and no action, suit or proceeding by any governmental or regulatory
authority shall have been threatened, against any of the parties to this Amended
and Restated Master Agreement, or any of the shareholders, members, officers or
directors of any of them, or any of the assets of any of the Anderson Parties,
or any of the Anderson Partnerships wherein an unfavorable judgment, order,
decree, stipulation, injunction or charge would (i) prevent consummation of any
of the transactions contemplated by this Amended and Restated Master Agreement,
(ii) cause any
29
of the transactions contemplated by this Amended and Restated Master Agreement
to be rescinded following consummation, or (iii) adversely affect the right of
Highwoods to own, operate or control the Anderson Partnerships (and no such
judgment, order, decree, stipulation, injunction or charge shall be in effect)
or own the assets of API.
9.5 Termination. The Anderson Parties shall have terminated the
Management and Leasing Agreements.
9.6 Legal Opinion. There shall have been delivered to Highwoods the
written legal opinion of Elrod & Thompson, counsel for the Anderson Partnerships
and Anderson and API, dated the Closing Date, in form reasonably acceptable to
Highwoods and its counsel.
9.7 Other Assurances. The Anderson Parties shall have delivered to
Highwoods such other and further certificates, assurances and documents as
Highwoods may reasonably request to evidence the accuracy of the representations
and warranties made pursuant to Article V, the performance of covenants and
agreements to be performed pursuant to Article IV at or prior to the Closing,
and the fulfillment of the conditions to Highwoods's obligations hereunder.
9.8 Review Period. Highwoods shall not have terminated this Agreement
pursuant to the rights granted to Highwoods in Section 2.3 and/or Section 2.5
hereof.
ARTICLE X
CONDITIONS PRECEDENT
TO ANDERSON PARTIES' PERFORMANCE
The obligations of the Anderson Parties to consummate the transactions
provided for herein on the Closing Date are subject to the fulfillment on or
before the Closing Date of each of the conditions in this Article X, except to
the extent that the Anderson Parties may, in their absolute discretion, waive in
writing one or more thereof in whole or in part.
10.1 Representations and Warranties. The representations and warranties
of Highwoods contained herein shall be true in all respects on and as of the
Closing Date with the same force and effect as if made on and as of such date,
and the covenants of Highwoods set forth herein shall have been complied with in
all material respects through the Closing Date, and a certificate to such effect
shall be executed and delivered to the Anderson Parties by Highwoods on and as
of the Closing Date.
10.2 Payment of Purchase Price. Highwoods shall have paid the Aggregate
Consideration in the manner described in Article III.
30
10.3 No Adverse Proceedings. No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been commenced, no
investigation by any governmental or regulatory authority shall have been
commenced, and no action, suit or proceeding by any governmental or regulatory
authority shall have been threatened, against any of the parties to this Amended
and Restated Master Agreement, or any of the shareholders, officers or directors
of any of them, or any of the assets of Highwoods wherein an unfavorable
judgment, order, decree, stipulation, injunction or charge would (i) prevent
consummation of any of the transactions contemplated by this Amended and
Restated Master Agreement, (ii) cause any of the transactions contemplated by
this Amended and Restated Master Agreement to be rescinded following
consummation or (iii) adversely affect the right of Highwoods to own, operate or
control the Properties (and no such judgment, order, decree, stipulation,
injunction or charge shall be in effect).
10.4 Legal Opinion. There shall have been delivered to the Anderson
Parties the written opinion of Highwoods's special counsel, Smith Helms Mulliss
& Moore, L.L.P., dated the Closing Date, in form reasonably acceptable to the
Anderson Parties.
ARTICLE XI
INDEMNITY
11.1 Representations and Warranties of Anderson Partners. Anderson and
API hereby agree, for themselves and their successors and assigns, jointly and
severally, to indemnify, defend and hold both Highwoods and HPI harmless from
and against any and all damage, cause of action, action, proceeding, expense
(including without limitation reasonable expenses of investigation and
reasonable attorneys' fees and expenses), loss, cost, claim or liability (each a
"Claim") suffered or incurred by either Highwoods or HPI as a result of any
untruth, inaccuracy or breach in or of any the representations, warranties or
covenants made in Article V above.
11.2 Scope of Anderson Indemnity. Notwithstanding anything to the
contrary contained in this Amended and Restated Master Agreement, Anderson shall
have no liability for any Claim which is asserted more than twelve (12) calendar
months after the Closing Date (except with respect to any Claim asserted because
of the untruth, inaccuracy or breach of Section 5.20 (a "Tax Claim"), the time
limitation for such a claim shall be the same as the statute of limitations
applicable to the Tax Claim) except with respect to Claims for which notice of
the breach or inaccuracy of the representations, warranties or covenants giving
rise to such right of indemnity have been given to Anderson by written notice
from Highwoods at any time within the twelve (12) month period following the
Closing Date.
11.3 Representations and Warranties of Highwoods. Highwoods hereby
agrees, for itself and its successors and assigns, to indemnify, defend and hold
Anderson, API and
31
the Anderson Partners harmless from and against any Claim
suffered or incurred by Anderson as a result of any of the following:
(a) any untruth or inaccuracy in any representations or
warranties herein; or
(b) to the extent as of the Closing Date Hyman Auerbach,
Bennie Auerbach, Leon Auerbach or any of the Anderson Parties or
Anderson Partners have not been released from any liability under or
guaranty of the Assumed Anderson Debt Financing or to the extent any
recourse is sought against such party under the Payable Anderson Debt
Financing after the Closing Date.
It is the express intention and agreement of the parties that the foregoing
indemnity shall survive the consummation of the transactions contemplated in
this Amended and Restated Master Agreement; provided, however, that Highwoods
shall not have any liability for expenses, damages, losses, costs or liability
incurred by Anderson with respect to any Claim which, other than principal and
interest or collection costs or other similar expenses related thereto under any
Payable Anderson Debt Financing or Assumed Anderson Debt Financing, arises or is
asserted more than twelve (12) calendar months after the Closing Date.
11.4 Notice to Indemnitors. Any party entitled to indemnification under
this Amended and Restated Master Agreement (the "Indemnified Party") shall give
prompt written notice to the party against whom indemnity is sought pursuant to
this Amended and Restated Master Agreement (the "Indemnifying Party") as to the
assertion of any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought under this Amended and Restated Master
Agreement. Except as otherwise provided in Sections 11.2 and 11.3, the omission
of the Indemnified Party to notify the Indemnifying Party of any such claim
shall not relieve the Indemnifying Party from any liability in respect of such
claim which it may have to the Indemnified Party on account of this Amended and
Restated Master Agreement, except, however, the Indemnifying Party shall be
relieved of liability to the extent that the failure so to notify (a) shall have
caused prejudice to the defense of such claim, or (b) shall have increased the
costs or liability of the Indemnifying Party by reason of the inability or
failure of the Indemnifying Party (because of the lack of prompt notice from the
Indemnified Party) to be involved in any investigations or negotiations
regarding any such claim, nor shall it relieve the Indemnifying Party from any
other liability which it may have to the Indemnified Party. In case any such
claim shall be asserted or commenced against an Indemnified Party and it shall
notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled
to participate in the negotiation or administration thereof and, to the extent
it may wish, to assume the defense thereof with counsel reasonably satisfactory
to the Indemnified Party, and, after notice from the Indemnifying Party to the
Indemnified Party of its election so to assume the defense thereof, which notice
shall be given within thirty (30) days of its receipt of such notice from such
32
Indemnified Party, the Indemnifying Party will not be liable to the Indemnified
Party hereunder for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. In the event that the Indemnifying Party does not wish
to assume the defense, conduct or settlement of any claim, the Indemnified Party
shall not settle such claim without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed. Nothing in
this Section 11.4 shall be construed to mean that either Highwoods or Anderson
shall be responsible for any obligations, acts or omissions of the other prior
to Closing, except for those obligations and liabilities expressly assumed by
Highwoods or Anderson pursuant to this Amended and Restated Master Agreement.
11.5 Effect of Indemnity. Nothing in this Article XI shall be construed
to mean that either Highwoods or the Anderson Parties shall be responsible for
any obligations, acts or omissions of the other prior to Closing except for such
obligations and liabilities expressly assumed pursuant to this Amended and
Restated Master Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices and demands which either party is required or
desires to give to the other shall be given in writing by personal delivery,
express courier service, certified mail, return receipt requested, or by
telecopy to the address or telecopy number set forth below for the respective
parties. All notices and demands so given shall be effective upon the delivery
of the same to the party to whom notice or a demand is given, if personally
delivered, or if sent by telecopy. If notice is by deposit with an express
courier service, it shall be effective on the next business day (if sent for
next business day delivery) following such deposit or, if notice is sent by
certified mail, return receipt requested, it shall be effective upon receipt.
NOTICES TO THE ANDERSON PARTIES:
To the Anderson Parties, to the addressee at the address
indicated on SCHEDULE 12.1 attached hereto.
33
with copies to:
ELROD & THOMPSON
1500 Peachtree Center
South Tower
225 Peachtree St., N.E.
Atlanta, Georgia 30303
Attn: Ken Weiss
Telephone: (404) 659-1500
Telefax: (404) 880-4757
NOTICES TO HIGHWOODS:
HIGHWOODS PROPERTIES, INC.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
Attention: Ronald P. Gibson
Telephone: (919) 872-4924
Telefax: (919) 876-2448
with copies to:
SMITH HELMS MULLISS & MOORE, L.L.P.
2800 Two Hannover Square
Raleigh, North Carolina 27601
Attention: Mack D. Pridgen, III
Telephone: (919) 755-8796
Telefax: (919) 755-8800
MANNING FULTON & SKINNER
3605 Glenwood Avenue, Suite 500
Raleigh, North Carolina 27612
Attention: Samuel T. Oliver, Jr.
Telephone: (919) 787-8880
Telefax: (919) 781-0811
No notice required or permitted under this Amended and Restated Master Agreement
need be sent to any Anderson Party in more than one legal capacity unless such
notice relates to such Anderson Party in that legal capacity.
12.2 Counterparts. This Amended and Restated Master Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
34
12.3 Severability. Any provision of this Amended and Restated Master
Agreement which is prohibited or unenforceable in any jurisdiction shall as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision on any other jurisdiction.
12.4 Assigns. This Amended and Restated Master Agreement shall be
binding upon and inure to the benefit of any and all successors, assigns, or
other successors in interest of HPI and Highwoods. This Amended and Restated
Master Agreement shall be binding upon and inure to the benefit of any and all
respective successors, assigns, personal representatives, executors, or other
successors in interest of the Anderson Parties; provided, however, that none of
the Anderson Parties shall assign its rights or delegate its obligations
hereunder without the prior written consent of Highwoods, which may be withheld
for any reason. Neither Highwoods nor HPI shall assign its rights or delegate
its obligations hereunder without the prior written consent of the Anderson
Parties. This Amended and Restated Master Agreement shall not confer any rights
or remedies upon any person or entity other than Highwoods, HPI, the Anderson
Parties and their respective successors and permitted assigns.
12.5 Public Announcement. Except as otherwise required by law, none of
the parties hereto may make public announcements with respect to the
transactions contemplated by this Amended and Restated Master Agreement without
the approval of the other parties, which approval may be withheld for any
reason.
12.6 Remedies. In the event that any party defaults or fails to perform
any of the conditions or obligations of such party under this Amended and
Restated Master Agreement or any other agreement, document or instrument
executed in connection with this Amended and Restated Master Agreement, or in
the event that any such party's representations or warranties contained herein
or in any such other agreement, document or instrument are not true and correct
as of the date hereof and as of the Closing Date, any other party shall be
entitled to exercise any and all rights and remedies available to it by or
pursuant to this Amended and Restated Master Agreement, documents or instruments
contemplated hereby or at law (statutory or common) or in equity; provided,
however, that in the event of a Closing of the transactions contemplated by this
Amended and Restated Master Agreement, the rights and remedies of each party
shall be limited to the rights contained in Article XI and in Section 3.3
relating solely to those closing adjustments allowed to be made in the
Post-Closing Adjustment Period of this Amended and Restated Master Agreement.
12.7 Captions. The captions and headings set forth in this Amended and
Restated Master Agreement are for convenience of reference only and shall not be
construed as a part of this Amended and Restated Master Agreement.
35
12.8 Exhibits and Schedules. All exhibits and schedules referred to in
this Amended and Restated Master Agreement and attached hereto shall be deemed
and construed as part of this Amended and Restated Master Agreement and for all
purposes all such exhibits and schedules are hereby specifically incorporated
herein by reference.
12.9 Merger Clause. This Amended and Restated Master Agreement and the
Acquisition Agreements, including the exhibits and schedules incorporated herein
and therein, contain the final, complete and exclusive statement of the
agreement among the parties with respect to the transactions contemplated
herein, and all prior or contemporaneous oral and all prior written agreements,
including the Master Agreement, with respect to the subject matter hereof are
merged herein.
12.10 Amendments and Waiver. No change, amendment, qualification,
cancellation or termination hereof shall be effective unless in writing and duly
executed by each of the parties hereto. No failure of any party to enforce any
provisions hereof or to resort to any remedy or to exercise any one or more of
alternate remedies and no delay in enforcing, resorting to or exercising any
remedy shall constitute a waiver by that party of its right subsequently to
enforce the same or any other provision hereof or to resort to any one or more
of such rights or remedies on account of any such ground then existing or which
may subsequently occur.
12.11 Governing Laws. This Amended and Restated Master Agreement shall
be governed by and construed in accordance with the internal laws of the State
of North Carolina and of the United States of America.
36
IN WITNESS WHEREOF, the parties have duly executed this Agreement by
their hands and under seal affixed hereto as of the date and year first above
written.
HIGHWOODS PROPERTIES, INC.
ATTEST:
By: /s/ Ronald P. Gibson
___________________________________
President
/s/ Edward J. Fritsch
- ----------------------
Secretary
[CORPORATE SEAL]
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc.,
General Partner
By: /s/ Ronald P. Gibson
___________________________________
Title: President
_________________________________
ANDERSON PROPERTIES, INC.
ATTEST:
By: /s/ H. Gene Anderson
___________________________________
President
- ----------------------
Secretary
[CORPORATE SEAL]
/s/ H. Gene Anderson
_______________________(SEAL)
H. Gene Anderson
6348 NORTHEAST PARTNERS A, (SEAL)
a Georgia partnership
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
AG JOINT VENTURE (SEAL)
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
ANDERSON PARTNERS (Southside/Corporate
Lakes), L.P., a Georgia limited
partnership (SEAL)
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
GWINNETT DISTRIBUTION CENTER
AA, a Georgia partnership (SEAL)
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
LAVISTA BUSINESS PARK AA, (SEAL)
a Georgia partnership
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
ANDERSON/NEWPOINT, L.L.C., (SEAL)
a Georgia limited liability company
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
OAKBROOK/MKKG JV, (SEAL)
a Georgia partnership
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
STEEL DRIVE PARTNERS, LP, (SEAL)
a Georgia limited partnership
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
ANDERSON/CHASTAIN, L.L.C., (SEAL)
a Georgia limited liability company
By: /s/ H. Gene Anderson
__________________________________
Title:_________________________________
LIST OF SCHEDULES AND EXHIBITS
Schedule 1 Anderson Partnerships
Schedule 1-1 Assumed Anderson Debt Financing
Schedule 1-2 Descriptive Property Exhibit
Schedule 1-3 Exchange Option Agreements
Schedule 1-4 Purchase Option Agreements
Schedule 1-5 Payable Anderson Debt Financing
Schedule 2.1(c) Acquired Anderson Partnerships
Schedule 3.1(a) In-Service Properties
Schedule 3.1(b) Development Properties
Schedule 3.1(c) Bluegrass Transactions
Schedule 3.1(d) Development Land
Schedule 3.2(a) Aggregate Consideration/Unit Recipients and Cash
Recipients
Schedule 3.5 Prepayment Penalties
Schedule 4.1 Third Party Commissions
Schedule 4.2 Brokers
Schedule 4.7 Personal Property of API
Schedule 5.1 Consent of Anderson Parties
Schedule 5.3 Conflicts
Schedule 5.7A Schedule of Leases
Schedule 5.7B Lease Commissions Assumed
Schedule 5.7C Highwoods Approved Leases
SHMM: 78723
Schedule 5.7D Lease Defaults
Schedule 5.7E Lease Consents
Schedule 5.8 Scheduled Contracts
Schedule 5.9A Personal Property
Schedule 5.9B Scheduled Liens and Encumbrances to Title
Schedule 5.10 Assumed Liabilities - Disclosed
Schedule 5.11 Insurance
Schedule 5.13 Claims or Litigation
Schedule 5.15 Exceptions to Financial Condition
Schedule 5.19 Condition of Improvements
Schedule 5.20 Taxes
Schedule 5.21 Management Agreements
Schedule 5.22 Operating Agreements - Exceptions to Termination
Schedule 5.23 Employee Benefit Plans
Schedule 5.26 Operation of Business - Exceptions
Schedule 12.1 Names and Addresses of Anderson Parties
Exhibit 1 Description - Class B Units
Exhibit 3.1(d) Form of Right of First Refusal
Exhibit 4.3 Form of Anderson Employment Agreement
Exhibit 6.3 Partnership Agreement
Exhibit 8.1(c) Form of Tenant Estoppel Certificate
January 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Highwoods/Forsyth Limited Partnership
Ladies and Gentlemen:
In connection with the Highwoods/Forsyth Limited Partnership (the
"Registrant") current report on Form 8-K (the "Report"), the Registrant
hereby agrees, pursuant to Item 601(b)(2) of Regulation S-K, to furnish
the Securities and Exchange Commission upon its request copies of the
schedules omitted from Exhibits 2.1 and 2.2 of the Report.
Very truly yours,
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, its general partner
/s/ Carman J. Liuzzo
Chief Financial Officer